Moldy smell when A/C is on, initially
 

Last autumn, I'd made a blunder... had my key fob in my pocket while I was doing things inside during a rain storm, and didn't realize it accidentally activated unlock-hold... causing the windows to go down. *DOH*! So much for having programmed VAG/COM for this feature. It bit me in the arse.

Anyway, I ended up with an inch of water in the back seat foot wells. I evacuated all of the water once the rain stopped and used carpet cleaner to get out all of the funk. It took a few days but the car started to smell perfectly fine.

But what I started to notice was that as soon as the A/C compressor would kick in when the car was cold, I'd get a funky/moldy smell coming from the vents. This was even after having changed the air filter (under the dash on the passenger side). It would eventually clear out as the car fully warmed up, approximately 5~10 mins. I figured it would work itself out over the course of a few weeks. Well now it is a few months and the degree of it has diminished a lot, but it is still there.

So...

Is there some other filter I need to hit? I checked the manual and couldn't find anything. Should I remove the vents and snake a cleaning rag down the ducts to clean the walls? Where could the funk be hiding?

Dealer has something they can spray into the A/C intake.

Try this: When the engine is warm, run the heater at full blast for 10-15 mins. That should kill the mold/bacteria that is growing in there. It's a common issue in the B5 A4 and many people solved it in that manner.